Estate planning isn’t just about death – it’s equally important to plan for potential incapacity, which can happen at any age due to illness, injury, or cognitive decline. Incapacity means being unable to handle personal affairs or make important decisions about financial and healthcare matters. Unlike disability, which may only affect physical abilities, incapacity impacts decision-making capabilities. Without proper planning through documents like financial and medical powers of attorney and living trusts, the courts may need to step in to appoint decision-makers.
Key Statistics and Considerations:
- One in four 20-year-olds will become disabled before retirement1
- 70% of adults over 65 will need long-term care2
- One in nine adults over 65 have Alzheimer’s disease3
- 66% of adults over 70 live with some form of cognitive disability4
- Incapacity can be temporary (like being under anesthesia) or permanent (such as from dementia
Taking a proactive approach through comprehensive estate planning allows you to choose trusted decision-makers, specify how incapacity should be determined, and ensure your affairs will be properly managed if you become incapacitated. This planning includes both financial and medical considerations and can include provisions for compensating those who may need to manage your affairs.
1Fact Sheet: Social Security, Soc. Sec. Admin., https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf (last visited Dec. 18, 2024).
2 How Much Care Will You Need?, LongTermCare.gov (Feb. 18, 2020), https://acl.gov/ltc/basic-needs/how-much-care-will-you-need.
3 Michelle M. Mielke et al., Considerations for widespread implementation of blood-based biomarkers of Alzheimer’s disease, 20 Alzheimers Dement. 8209 (2024), https://pmc.ncbi.nlm.nih.gov/articles/PMC11567842.
4 Joanne Tompkins, Seize the Data: An Analysis of Guardianship Annual Reports, J. of Aging & Soc. Pol’y, May 5, 2024, at 1, https://www.tandfonline.com/doi/full/10.1080/08959420.2024.2349494#abstract.